Hindalco Q3 net up 7.5% at Rs359 core despite higher outgoes

12 February 2015

Aditya Birla Group company Hindalco has reported a 7.5 per cent year-on-year increase in its net profit for the October-December 2014-15 quarter, at Rs359 crore compared to Rs334 crore in Q3 of the previous financial year.

Net sales for the quarter stood at Rs8,603 crore, an 18 per cent growth compared to Rs7,273 crore in the corresponding quarter of the previous year.

Profit before interest, tax, depreciation and amortisation (PBITDA) was up 36 per cent at Rs1,135 crore compared to Rs834 crore in the corresponding quarter of the previous year the company stated in a release.

However, the company said, finance cost and depreciation were significantly higher compared to Q3FY14 due to progressive capitalisation of greenfield projects.

Hindalco said higher sales during the quarter reflected increased volume and better realisation in both aluminium and copper businesses.

The higher revenue is attributable to higher volume and higher realisation. As a result, the segment results of aluminium business went up from Rs170 crore in Q3FY14 to Rs384 crore in Q3FY15.

In the copper business, revenue stood at Rs4,976 crore compared to Rs4,817 crore in Q3FY14, reflecting enhanced volume and improved by-product credit. The segment results rose from Rs300 crore in Q3FY14 to Rs396 crore in Q3FY15.

Aluminium metal production was up 37 per cent at 217 Kt against 158 Kt in Q3FY14, following the ongoing ramp-up at Mahan smelter and Aditya smelter. On a sequential basis, metal production was up 16 per cent.

Alumina production (including Utkal) was up 38 per cent at 593Kt over Q3FY14 levels. Hindalco said the standalone results do not include the performance of Utkal Alumina refinery, as it is a subsidiary of the company.

Coal availability is posing a significant challenge for ongoing pot ramp-up at the upcoming Mahan and Aditya smelters.

The downstream value added production was impacted by adverse market demand conditions.

Copper production was higher at 95 Kt against 89 Kt in Q3FY14 (it was higher at 96 Kt in Q2FY15). Value added CC rods production stood at 36 Kt compared to 34 Kt in Q3FY14.

Hindalco said while the core operational performance of the company in terms of volume is showing a remarkable improvement, coal availability is impacting the pace of ramp-up in greenfield aluminium projects. With the coal auction planned shortly, the company is looking forward to a faster resolution to the coal availability issue.